Further Projects

Roundtable assesses growth of impact investing

March 9, 2012 │ New York

The Stanford Social Innovation Review convenes roundtable to discuss the development of impact investing.

From Wall Street to the White House, attention and funds are increasingly being directed towards the field of impact investing. Also known as social finance, impact investing involves the use of standard business practices and investment of private capital in mission-driven ventures that promise broader societal benefits alongside financial returns. The field has grown exponentially as mainstream investors increasingly turn towards socially responsible investing; the Monitor Group, a consulting firm, has predicted that impact investing will grow from its current assets of $50 million to over $500 billion by 2020.

The Stanford Social Innovation Review recently assembled members from the Global Agenda Council on Social Innovation to assess the future of impact investing. The roundtable consisted of Deutsche Bank’s Managing Director of Social Investments Asad Mahmood, Álvaro Rodríguez Arregui of Ignia Partners and Compartamos Banco, Iftekhar Enayetullah of Waste Concern, and Jacqueline Novogratz of Acumen Fund.

In the resulting article, published in the Stanford Social Innovation Review’s Winter 2012 issue, Mahmood emphasizes the need for more cautious expectations for the field, pointing to microfinance as a similar example of where claims and reality do not always match up.

“We have positioned this sector as being beneficial to the poor and beneficial to society,” Mahmood said in the Review. “To me, one of the greatest risks in the sector is that it pumps up all its potentiality and then fails to focus on the customer, thereby creating no loyalty to the business and none of the social outcomes that were promised.”

The roundtable also discussed the potential for public/private partnerships in social finance, the need for the continued involvement of philanthropists and foundations, and the importance of local knowledge in ensuring the success of social ventures.

To read the full story, “Roundtable on Impact Investing,” please click here.